(Reuters) -Philip Morris International beat analysts' expectations for quarterly profit and raised the lower end of its annual earnings forecast, as tobacco and labor costs ease, and demand remains robust for its smokeless Zyn and IQOS products.
In December last year, Philip Morris (NYSE:PM) acquired Hay-maker Swedish Match for a share of the popular smokeless and spitless nicotine pouches as younger customers increasingly prefer alternatives to traditional combustible cigarettes.
Shipment volume growth for Zyn in the U.S. jumped more than 50% in the three months ended June 30, the company said on Thursday.
From mid-2024, Philip Morris will have the sole rights to market and sell IQOS products - which heat cigarettes instead of burning them - in the U.S., as per its deal with Altria Group (NYSE:MO).
Total IQOS users at the end of June were up by 1.4 million from March, the company said, taking the total number to 27.2 million.
Its second-quarter adjusted profit per share of $1.60 beat analysts' average estimates for a profit of $1.47, as per Refinitiv data.
Net revenue rose 14.5% to $8.97 billion, topping estimates of $8.65 billion.
The 176-year old company is also benefiting from higher prices for its traditional combustible cigarettes, after supply-chain snags inflated freight and raw-material costs last year.
Philip Morris now expects these pressures to ease in the second half of the year, allowing the company to raise the lower-end of its full-year profit forecast.
The company boosted the lower end to $6.13 per share from $6.10, while retaining the upper end at $6.22.